IBM announced today that it has entered into a definitive agreement to purchase Internet Security Systems (ISS), a publicly traded Internet security provider based in Atlanta.

The all-cash transaction is worth about $1.3 billion, or $28 per share, and is subject to ISS shareholder and regulatory approvals and other closing conditions, according to an IBM statement. The company expects the transaction to close by the end of 2006. ISS, which has 11,000 customers, has sold security solutions to companies and governments to help them ward off Internet threats on networks, desktop PCs and servers. ISS software and services monitor and manage network vulnerabilities and respond to potential threats.